Porters Five Forces - Article Example

Bargaining power of suppliers
The suppliers have low bargaining power as there is a minimal cost requirement for the inputs.
Bargaining power of buyers
Also, the buyers have high bargaining power as there is an increasing number of substitutes available and they show sensitivity to the prices charged to them. Moreover, they are looking for special customized services so that they feel valued.
The threat of new entrants
New entrants have medium to low intensity as there are low barriers for the industry in general but relatively high barriers for the specific target markets. Enterprises have to invest huge amounts of money in Research and there are patented algorithms. Additionally, there is a strong requirement of having a strong brand name to compete effectively.
E-Harmony’s value proposition
To analyze E-Harmony’s value proposition or business model, the core competencies and value-creating constituents are discussed. The core competency of the firm is in its highly integrated system which comprises three components i.e. Personality Profile, Matching Algorithm, and Guided Communication. This entire procedure has been designed in such a way that the customers contend with the value for their money invested in availing of the service. Also, this procedure has been incorporated after extensive research so that matchmaking is undertaken with perfection.
In addition to these three crucial elements, the other value-generating activities are openness in communication, creation of E-Harmony labs, singles-only policy, sufficient allocation of funds in marketing techniques, and premium prices for memberships.
E-Harmony’s Business-Level Strategy
After a detailed review of E-Harmony’s internal and external environment, it is apparent that it is following a differentiated strategy for attaining a competitive advantage. The company is mainly targeting the niche market which comprises a highly competent pool of candidates. Although the process of registration is time-consuming eventually the customers are satisfied as they find the most compatible spouse.
Furthermore, the enterprise has allocated an adequate amount of funds to marketing campaigns so that it can employ appropriate promotional tools. It has even made sure that the customers are provided genuine and credible services so that they become lifelong members of the website. The business strategy of E-Harmony is to align its practices and values with the desires of those people who are in search of a long-term and loyal commitment to a compatible spouse.
Another major advantage of the firm in addition to the Matching Algorithm is the selectivity criteria. By providing the services to only single members, there is a high probability that a successful relationship is created and it enhances the chances of seeking a harmonious partner with effectiveness. Hence, the firm has been able to provide genuine and competent services due to clarity about the vision and core purpose of the business. Read More